If you’re like many of my clients, at some point, an insurance salesperson will approach you and try and convince you that you need a universal life insurance policy. They may even call themselves an “advisor” or “financial planner” in the process.

In some cases, they’ll volunteer to do your financial planning for you, for free, if you only buy that universal life policy. I’m here to tell you that they’re wrong. They’re not fiduciary financial planners or advisors (and they get a nice fat commission check when they manage to sell policies to you). And their “financial planning” is far from free because you’ll overpay for insurance you don’t even need.

Most people do not need universal life insurance, and those who buy universal life are proud owners of a financial product that is not the best fit for them.

Universal Life Insurance Is Not an Appropriate Investment Vehicle

This all may sound hard to believe because life insurance salespeople do an amazing job at pitching you on their products. They are salespeople, after all — it’s their job to sell you on what they have to offer!

One of their favorite lines is that universal life is an investment that can both protect your family and increase your wealth. While the right kind of life insurance can protect your dependents from financial hardship should you pass away while they rely on your income, insurance is not an investment.

It’s a product designed to do just that: protect your family from a hardship they might otherwise face if you (and your income) were not around to provide for them. If you want to invest, you need to contribute to your 401(k) and Roth IRA. If you’re maxing out both those accounts, consider opening a taxable brokerage account and fund that as well.